Stablecoin is the bread and butter of the crypto industry, and the two most popular dollar  peg assets are USDT and USDC.  

Stablecoin means you can pay each other for the service without worrying that your  payments will drop dramatically after one day.  

But which stablecoin is best for your daily crypto activity? Which one is safer and has a  better future?  

Due to the many differences between USDT and USDC, we have placed these two popular  Stablecoins side by side for complete information. 

So, in this article, we will be discussing what Stablecoin is and the differences between  Tether and Coinbase. 

What is Stablecoin? 

"Stablecoin" as the name implies, is a type of cryptocurrency whose price is related to the  fiat currency (USD, EUR, GBP, etc.) or the price of valuable materials (gold, oil, platinum,  etc.). In this way, you can keep your money safe without worrying about the fiat price of  cryptocurrencies going up or down- the prices are constant.  

The collateral currency of this coin is the US dollar, and the token price is stable because  the user can theoretically contact the token issuer to exchange the token for fiat money. It requires the token issuer to be able to pay the price of the token.  

P.S: Companies that issue tokens should be regularly audited for possible fraud of any kind. 

For a long time, Bitcoin and other cryptocurrencies could only be exchanged for other cryptocurrencies or fiat currencies. If they wanted to exchange their coins, there was no  way for cryptocurrency holders to move to fiat assets without completely leaving the  cryptocurrency ecosystem. This is where Stablecoins emerged.  

Many cryptocurrency traders use Stablecoins to stay in the ecosystem and keep their assets  at a constant price. Due to the low volatility of digital currencies, they can get exchanged  24 hours a day without the need for cash at the bank. These tokens will always retain their  present value as long as the supporting elements are properly maintained. 

What is USDT (Tether)? 

Known for the symbol USDT, the tether is the most popular stablecoin. Tether is the  tokenized version of the USD. That is, it is fixed at the US dollar in a 1: 1 ratio. This  relationship with the US dollar is what "stabilizes" the value of this coin. 

The only reason the 1USDT is worth 1USD is that the exchange holds a USD reserve to  cover all the USDTs that exist. USDT can be issued, traded, or transferred like Bitcoin and  other cryptocurrencies. Tether was ranked the third or fourth-largest cryptocurrency with  a market capitalization of over $ 30 billion- it is often the most widely traded altcoin.  

Tether Limited is not only the name of Stablecoin but also the name of a Hong Kong-based  private company that issues tether coins. The purpose of the tether is to make trading  cryptocurrencies easier and cheaper. As of 2021, more than 75% of Bitcoin transactions  are on the tether. Some invest in tethers, but they are primarily used to hedge liquidity and  volatility when trading other cryptocurrencies such as Bitcoin. There are several reasons  to use stablecoin like the tether, but most of them are unwilling to trade cryptocurrencies  with other volatile crypto assets or regular currencies such as dollars. 

What is USDC (Coins)? 

USD Coin (USDC) is the true representation of digital money in this digital age. It is a  USD-backed cryptocurrency that competes with Tether (USDT) and TrueUSD (TUSD). In  short, USD Coin is a service that tokenizes the US dollar and allows it to be used on the  Internet and public Blockchain. In addition, USDC tokens can be converted to USD at any  time. The ERC20 smart contract guarantees the issuance and redemption of USDC coins.  Putting US dollars on the Blockchain makes it possible to send them anywhere in the world  in minutes and gives cryptocurrencies the much-needed stability. It also offers new  transactions, lending, risk coverage, and other options.  

The USDC, and its predecessor, aim to address two major concerns about existing  cryptocurrencies - Excessive volatility and fiat to cryptocurrency conversion. In contrast  to tether, the project arose from the recognition that the industry needed stablecoin lined  with fiat money with robust governance and transparency.  

USD coins don't come out of anywhere. According to Circle, each USDC coin is backed  by 1USDC. Tokenization is the process of converting US cash into USDC tokens.  Therefore, the conversion from USD to USDC is done in three steps:  

∙ The user transfers USD to the token issuer's bank account.  

∙ Issuers use USDC smart contracts to create the same amount of USDC.  

∙ The user receives the newly issued USDC, but the replaced US dollar is retained as  a reserve. 

Should you use USDC or USDT? 

Stablecoin's growth has outpaced most other cryptocurrencies. From surveys and  conversations with hundreds of customers and prospects, it depends on your specific needs,  preferences, and your customer profile. 

USDC is commonly used by institutions in the United States (or institutions where  Coinbase is offered in other countries). If the customer is a company, we recommend using  USDC to invoice the customer.  

On the other hand, USDT is commonly used by traders and investors. A tether is a tool that  allows traders to protect their profits and stay in cryptocurrencies. It also allows you to  keep your money on the exchange without exposing yourself to volatile Bitcoin prices. If  the customer is a trader, USDT may be the right choice. 

Regardless, let's look at more differences so you can figure out which stablecoin best suits  your needs. 

Tether was created by Tether Limited, while USD Coin was by Center (Circle and  Coinbase) 

Tether was launched in 2014, while USD Coin was in 2017. 

Tether is the largest stablecoin, while the USD coin is the second-largest Stablecoin by market cap and trading volume. 

Tether is not supported on decentralized finance platforms, while USD Coins are  available on decentralized finance platforms and Compound. 

USD Tether accounts for 23% of all stablecoin markets with a total supply of $26.8  billion (up from $518 million in early 2020), while USDT supply is nearly $54  billion and accounts for greater than 58% of the total stablecoin supply. (It fell below  60% for the first time in 2021). 

USD Coin is subjected to regular audits, while Tether has been reluctant to comply  with audits and investigations.


How to buy USDT or USDC  

With Tradefada, you can purchase USDT or USDC within a few minutes with your  credit/debit card and bank transfer.

Final Thoughts 

USDC and USDT are Stablecoins pegged to the US dollar and can be used for trading  and/or investment. Even though USDT is the most liquid stablecoin, there has been a  debate in recent years that institutions accept USDC instead of USDT.  

Ultimately, whether you are using USDC or USDT, it is always good to do your research  to find the right stablecoin for you. 

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